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Marcus Jenal
Marcus Jenal was born in Davos, Switzerland. He studied environmental sciences at ETH Zurich. The focus of his work in international development lies on market and private sector development and he has worked in Vietnam, Mongolia and Bangladesh. Based on his background in natural sciences, he is keen in using systemic tools and approaches for development. At the moment, he works as independent consultant with his own company called Sound Systems Consulting.
brief
November 2010
One drawback of direct asset transfers was pointed out by Luis E. (Lucho) Osorio-Cortes: Interventions where significant subsidies are directed at groups of very poor people are prone to corruption, power abuses, and information asymmetries. They are furthermore expensive2, small scale, and tend to create dependencies instead of empowerment. Thus, as Molly Ornati points out, [d]irect asset transfers have to be carefully targeted and implemented with a range of complimentary services. Some of those services could be technical training, savings group integration or measures targeting health and education. Hand-holding during the process is essential to build the confidence of the people. Confidence being an asset (human capital) that is so essential for a better and more productive life, as pointed out by Jan Maes. Similar conclusions were drawn by a recent study3 of the Institute of Development Studies (IDS) cited by Lucho: While safety net programmes may reduce immediate vulnerability, they do little to build the other aspects of competence, in particular the element of voice. A long-term, nuanced approach to intervention needs to be adopted that focuses on the agency, competence and interconnection of pastoralists in their relations with government, traditional institutions and service providers.
could happen through communities giving favourable loans or even grants to assetless community members to start their own business or through the local government providing access to land or water bodies. Service contracts between the extreme poor and service providers, where a service provider provides initial investments, inputs, and services on a profit sharing basis while the extreme poor invest only their labour also seem to be promising. Especially, since they also directly help the extreme poor to build up productive assets. One could also think to involve socially responsible enterprises or social enterprises that finance their investments to the poor or cover the risk when working with the poorest through other profitable businesses, according to Marcus. Linda concludes that [a]lthough the very poor may be assetless in terms of savings, land or other saleable items, they often have available resources time, energy and ingenuity. These resources can be used to make them valuable partners for other market actors in a specific value chain, as experienced by Linda in a project in Pakistan, where homebound rural women were integrated in a women to women network that enabled the poorest and least mobile women to participate in a market chain for embroidery.
cited by Jim which found that that the majority of microentrepreneurs would rather be working for someone else than themselves.
Hence, the basis of every intervention targeted on the extreme poor in particular or on improving (market) systems in general is a thorough and comprehensive analysis of the system(s) the poor live in. Systems analysis implies to set boarders to a part of the system we want to analyse (e.g. only the market system, the social system of the community, etc.), not neglecting however the external influences on the system, concludes Marcus. How such an analysis can be done in practice and what experiences have been captured by different practitioners should be the topic of a follow up discussion at the MaFI group.
Endnotes
1
Although the bottom 10% were mentioned, no formal definition of extreme poor or poorest of the poor has been introduced in the discussion.
2
However, see TED talk by Esther Duflo where she shows that in some instances direct asset transfer can be more efficient and effective than other measures. See <http://www.ted.com/talks/esther_duflo_social_e xperiments_to_fight_poverty.html> [accessed 14/05/2010]
3
IDS Working Paper 340, April 2010, Raising Voice Securing a Livelihood: The Role of Diverse Voices in Developing Secure Livelihoods in Pastoralist Areas in Ethiopia in Solo and Manado, Indonesia.